Amazon's talks with MGM bring fresh shine to old movie libraries

James Bond and Rocky Balboa may be past their prime, but a nearly insatiable appetite for content in today’s streaming era has boosted their appeal.

 

The characters are from a Metro-Goldwyn-Mayer portfolio of movies and shows that has attracted a $9 billion offer from Amazon.com, according to a person familiar with that matter, part of a massive reshuffling of streaming content this week. AT&T is merging its WarnerMedia division with Discovery in a deal that will create a new media company with purportedly more material than Netflix, the market leader in streaming.

 

The frenzy also is boosting shares of another potential target, Lions Gate Entertainment. The film-and-TV studio jumped 7.3 per cent on Tuesday. Its stock is now up 57 per cent for the year.

 

The latest speculation follows bidding wars in recent years for back catalogues of sitcoms, with South Park and Seinfeld fetching $500 million or more apiece. The question now is whether the biggest streaming providers will further consolidate the market, gathering larger arsenals of content and squeezing out smaller rivals.

 

“There’s going to be a handful of winners in the streaming wars, and content is always going to be the important factor,” said Tuna Amobi, a media and entertainment analyst at CFRA Research. “Everyone is upping their spending significantly. It seems almost what you have to do to be considered a very serious or viable competitor.”

 

The few studios that haven’t sold out completely to streaming services have still engaged in lucrative one-off deals. In March, Netflix paid $450 million for the rights to the next two films in the Knives Out franchise, produced by Media Rights Capital and distributed by Lions Gate. The deal was one of the largest movie-rights deals ever, and worth $140 million more than what the first movie generated in global box-office sales.

 

Streamers are also paying big for old ideas. Walt Disney said it will spend $16 billion on content a year by 2024, largely by plumbing the depths of its own intellectual property. The company announced in December that it’s making 10 Star Wars series and 10 Marvel series, as well as shows based on characters from Moana, Zootopia and Big Hero 6. Even Dug, the dog from Pixar’s 2009 film Up, will get his own spotlight — all part of a push to bolster the company’s 18-month-old Disney+ service.